The world of cryptocurrency is a little different from the stock market, share market or any other market. Investing in Cryptocurrency is one such way from where you can get returns of not only 2x, 5x or 10x but also 50-100x. But before investing money in the crypto market, you need to know how and why is the price pump and dump of crypto?
How crypto currency price up and down ?
There are many reasons for the fluctuations in the price of crypto currency, but in this article I have told you 5 reasons due to which the price of crypto currency keeps on fluctuating. Hello friends, my name is Sunil, and in today’s post we will know why the price of cryptocurrency increases, and why it decreases?
1. Demand and supply of crypto coins
This law of economics directly affects the value of cryptocurrency, according to this rule-
- If demand is low and supply is high – whenever the demand for a crypto coin is less than its supply, it will reduce the value of the crypto.
- If the supply is low and the demand is high – If the supply of a crypto coin is less, and its demand is high, then the value of the crypto coin will increase.
2. Crypto supply
Whenever the supply of a crypto currency is fixed, that is, if the supply limit has been kept, and if that limit is exceeded, then in such a situation the crypto coin starts becoming popular and the price of the crypto coin also starts increasing.
3. Cost of crypto production
Any type of crypto coin is created through the mining process, Mining for cryptocurrency involves using high powered computers to verify the next block on the blockchain, as the cryptocurrency is working on the blockchain method. .
And verifying the blockchain requires high power computer systems. Participants invest in expensive equipment and electricity to mine cryptocurrencies. The cost of creating cryptocurrencies in this way is very high, and as the manufacturing cost of cryptocurrencies increases, makers of cryptocurrencies try to inflate the prices of cryptocurrencies as well.
4. Listing on Different Crypto Exchanges
For any type of cryptocurrency to be accessible to the public, it is necessary to list that cryptocurrency on any crypto exchange. Whenever a cryptocurrency is listed on several crypto exchanges, the cryptocurrency reaches many people, and people try to buy that cryptocurrency as much as possible.
But there are many popular crypto exchanges like Binance, Coinbase, Huobi, Kucoin, Gate etc. The cost of listing a crypto currency on these crypto exchanges would have been very high, and if a cryptocurrency gets listed on these different exchanges, the value of such cryptocurrency would surely increase.
5. Crypto Mass Adoption
One of the main reasons for increasing the price of any crypto currency is that people accept crypto currency, that is, how acceptable any kind of crypto currency is.
For example, you can usually make any payment in bitcoin, just like in Singapore, bitcoin is accepted as a transaction in Singapore. Apart from this, when Dodge coin came in the market, earlier it did not have any specific price, but when Elon Musk said that from now on Dodge coin will be accepted as a transaction in his company, then after that the price of Dodge coin was very high. increased too much.
So in the same way, whenever people adopt any crypto currency in real life and they accept crypto currency as a payment method, and any crypto currency starts being used in normal transactions, then the price of such crypto currency The pump starts.